Life Sciences – One of the few sectors showing resilience
30 April 2020
Over the course of the last few weeks, as a team we have been fortunate enough to inhabit one of the notably resilient sectors and have focused our efforts on making sure our clients are ok, as well as trying to understand short and medium term impacts on our sector.
For now though, I will be highlighting a few key points:
- Pharma is one of the least-impacted industries globally, and stands at the forefront of trying to solve the extraordinary challenge we face – i.e. how to find, treat and prevent this from happening again. We’re proud to say some of our clients are helping in some way to do this
- Deals are continuing, and in some cases processes are being launched. Where trading isn’t impacted, companies are still going ahead with processes and PE are beginning to look beyond portfolio companies. We are involved in live deals, and expect this to continue
- Without downplaying the human impact, there is a valuation conundrum. Investors expect value in the current market, so naturally some downward pressure exists. However, why would a business showing no financial ill-effects from COVID-19 accept an arbitrarily reduced valuation? We continue to see value and long term defensibility in the sector, and will be exploring what this means for value expectations in subsequent posts
In the longer term, some fundamental changes are no doubt afoot. Remote delivery of trials and care herald a new dawn for tech-enabled pharma services. On-shoring and pandemic proofing of supply chains is likely to lead to opportunities for manufacturers in Europe to show their worth. Drug development and regulatory advisors will continue to be in demand as agencies adopt never before seen pragmatism. In short, we’re proud of what our clients and their peers/colleagues are doing to advance the science behind pharma innovation.
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